On February 18, 2025, the Illinois House introduced and referred HB 3673 to its Rules Committee . See attached draft copy at https://legiscan.com/IL/text/HB3673/id/3109030/Illinois-2025-HB3673-Introduced.html
Like the New Jersey, Colorado and New York bills that were previously reported on and which are being considered by their respective state legislatures, if enacted, the Illinois Climate Corporate Data Accountability Act could become the fifth bill passed in the United States, which bills are all aimed at requiring entities with connections to Illinois to report on their greenhouse gas emissions under Scope 1, Scope 2 and Scope 3 beginning 3 years from the effective date of the Illinois Bill (which could be as soon as 2028). Illinois would join Colorado, New Jersey, California and New York (if New York’s, New Jersey’s and Colorado’s bills move to passage) as the fifth state in the US in requiring this type of reporting for companies with over $1 Billion in revenue.
Between Illinois at $1.025 Trillion, New Jersey at $666.9 Billion, Colorado at $437 Billion, New York at $1.6 Trillion of real GDP and California at $2.9 Trillion of real GDP, these four states together would represent more than 30.8% of the US’s real GDP being subject to Scope 1, 2 and 3 reporting requirements for greenhouse gas emissions.
California passed their version of a very similar reporting bill, SB 253, in 2023, with an effective date of January 2026. Illionois’ bill, if enacted, required regulations to be passed by July 1, 2026, with an effective reporting requirement for entities subject to the bill during 2027 for Scope 1 and 2 and 2028 for Scope 3. Colorado’s bill if passed will require reporting of Scope 1 and 2 by January 1, 2028, and Scope 3 by January 1, 2029. New Jersey’s bill, if passed, will require reporting of Scope 1 and 2 within 3 years of the passage of the NJ Bill and Scope 3 within 4 years of passage of the Bill. New York’s bill if passed will require reporting of Scope 1 and 2 by 2027 and by January 1, 2028, for Scope 3.
As readers will likely recall and as commented on in our pieces on New Jersey, New York and Colorado, the SEC had pursued a similar path during 2023 and 2024, issuing proposed rules, and then final rules and then revised final rules which were then challenged and consolidated into one case in the 8th Circuit. The SEC’s final rules only required reporting on Scope 1 and 2 after receiving a backlash of comments about required Scope 3 reporting. As of February 11, 2025, the SEC’s acting Chairman Mark Uyeda said that the Commission will pause litigation of its climate disclosure rule in the 8th Circuit case, effectively ending, for now at least, the SEC’s pursuit of federal rules focusing on climate disclosure of Scope 1 and 2 greenhouse gases for reporting companies.
Despite the SEC’s position, it appears that states will continue to pursue their own path regarding climate disclosure. While California’s law had been challenged by various parties, earlier this month on February 3, 2025, the District Court for the Central District of California issued an order (https://www.troutman.com/a/web/gEwAfXN75c6MMmenKh3yd3/us_dis_cacd_2_24cv801_d96315207e190_order_granting_defendants_motion_to_dismiss_plaint.pdf) dismissing constitutional challenges posed to SB 253 and SB 261 and clears a path for the California Air Resources Board to develop necessary implementing regulations.
The Illinois, New Jersey, Colorado and New York bills are very similar to the California bill and require reporting starting in 2027 and additional reporting in 2028 for Illionois and New York and starting in 2028 and continuing in 2029 for Colorado and potentially in 2028 and 2029 for New Jersey depending on when the NJ version is passed. The bills also require either a third-party verification in the case of Colorado, or a third-party report of limited assurance on Scope 1 and 2 in 2027 and a reasonable assurance report starting in 2031 and if in New Jersey beginning in the 4th year after passage of the NJ Bill and thereafter.
Note that unlike the New Jersey bill there is not a specific penalty per day for the failure to report.
If Illinois follows the path of California here, companies with limited contacts to Illinois will find themselves subject to this reporting regime and need to put in the work to measure, monitor and report on their Scope 1, 2 and 3 greenhouse gas emissions if they have sales of over $1 Billion Dollars (and those sales need NOT be in Illinois alone, rather they are in the aggregate and likely will include subsidiary and related entities).
Green Spouts: While it is highly likely that various parties like the US Chamber of Commerce (who sued California for implementing SB 261 and 253) will also attempt to block Illinois from implementing its version of HB 3673, given the District Court’s ruling noted above, it appears that if passed in Illinois, that the constitutional challenges raised by the plaintiffs are not likely to withstand Illinois court scrutiny and Illinois could join California (and Colorado, New Jersey and New York) as requiring such reporting as early as 2028. Again, the Bill needs to clear the House Rules Committee and then needs to be voted on and approved by the full House, the Assembly and also needs the Governor’s signature, but it appears that these steps are not only possible but likely in 2025, partially/fully in reaction to the Federal government’s overall environmental position and its position taken in withdrawing from the SEC Final rules on climate disclosure. This author’s view is that the Bill will likely pass in Illinois and in New Jersey, Colorado and New York and be signed by the respective Governors, will attract challenges like California’s version did and that those challenges under Illinois, New Jersey, Colorado and New York law will survive such a challenge and that these laws will become a reality during 2025/2026.
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